Prices at the pump expected to drop

INDIANAPOLIS (WISH) - A small drop this afternoon in the price of gas in the Circle City: GasBuddy showed an average of $4.13 a gallon for regular unleaded Friday, down a few cents from Thursday - not nearly the kind of drop wholesale prices indicate should be taking place.

Oil prices aren’t up. Neither are wholesale gasoline prices. So 24-Hour News 8 went back to a local expert to find out what's going on.

Lannie Cohen, an Indianapolis commodities trader, said there's been a big drop in wholesale prices in the past few days.

"Gasoline, unleaded, dropped 34 cents over the past three days, so it should start showing up at the pump," he said.

Yet retail pump prices still stay stubbornly high.

Profit is one reason. Retailers say they hold the line on prices when wholesale costs go up, often cutting their profit per gallon to nearly zero. Now, they have a chance to make some of that money back.

And Cohen, who buys and sells gas and oil futures from his Indianapolis office, said there may be another reason.

“They have to go through their existing inventories first,” he said, “before the new prices are going to be reflected

Cohen said while gas and oil prices have been volatile on the futures market, they have been mostly down for a week now.

That, he said, means that soon, you should see a significant drop at the pump. But he still said he expects that over the long term, pressure will push prices back up.

“So we have to enjoy this while we can,” he said.